178: Rookie Reply: Why Real Estate Debt Isn’t So Scary

Real Estate Rookie

BiggerPockets

How To, Entrepreneurship, Business, Education, Investing

4.7 • 1.8K Ratings

🗓️ 30 April 2022

⏱️ 13 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week’s question comes from Jessica through Tony’s Instagram direct messages. Jessica has seen what Tony and his wife Sara have been doing while building their short-term rental empire. But, Jessica is having some doubts. She’s asking: How do you invest in real estate when the idea of debt scares you? Many new investors have this fear. If you’re buying your first property, the thought of five or six-figure debt may seem like a massive weight on your shoulders. After all, isn’t the goal to be debt-free? Fortunately for real estate investors, the answer is no. Using leverage to buy properties makes your investing far more profitable and can help you get comfortable when taking on good debt. Here are some suggestions: Scared of debt? Pay off your personal debt before you invest in rental properties Think of debt as a tool that can help you build wealth with real estate Know the difference between good debt and bad debt and how to use both Define your “worst-case scenario” if you’re unable to pay your rental mortgage Use the BiggerPockets Calculators to calculate your rental property profits (especially when taking on debt!) And more in the episode… If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE). Links from the Show Real Estate Rookie Podcast Real Estate Rookie Youtube Channel BiggerPockets Forums Real Estate Rookie Facebook Group Real Estate Rookie Podcast in Apple Podcast Irvine Company Sam Zell's Website Check the full show notes here: https://www.biggerpockets.com/blog/rookie-178 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Real Estate Rookie episode 178.
0:05.4	My name is Ashley Care, and I'm here with my co-host, Tony Robinson.
0:13.8	And welcome to the Real Estate Rookie podcast, and if this is your first time joining us,
0:17.9	we are the podcast to focus on those investors at the beginning part of their journey.
0:22.6	So if you haven't done a deal, we're still starting.
0:25.9	This is a podcast for you because you're bringing the inspiration and the information you
0:29.1	need to get started.
0:30.1	So Ashley Care, what's going on, what's new?
0:33.1	Well, once again, I feel like I'm using this for like 20 episodes and recording from
0:37.1	my couch.
0:38.1	Oh, I need on ice, but I also have my little youngest here.
0:43.2	So if you see a hand or a leg or something flying to the side of the camera as you're watching
0:47.8	on YouTube, he is my producer today.
0:51.9	So we had him on another episode where I think he made it, you know, maybe halfway through
0:56.7	before he asked if he can leave himself.
0:59.7	It was no longer last day.
1:01.7	Are we going to see the famous Ashley Dutstair?
1:04.7	Oh, my gosh, I forgot about this, yeah, this was probably almost a year ago.
1:10.3	I was on PC with my kids, and we were in a hotel room, just one room, and I had to record
1:17.5	and the three kids, I put the TV on for them on mute, and they were two sitting at the
1:22.6	front.
1:23.6	And I was at a one starts jumping from bed to bed, and I had to give the Dutstair, and
	...

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